THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(NOTE: SUNDAY'S BROADCAST OF THIS SHOW WAS INTERRUPTED TO AIR A SPEECH BY REVEREND JEEMIAH WRIGHT AT AN NAACP DINNER IN DETROIT. THIS IS THE COMPLETE LOU DOBBS TRANSCRIPT. THE SPEECH WILL BE SENT AS A SEPARATE TRANSCRIPT.) LOU DOBBS, HOST: Tonight: A remarkable admission by Mexico's president, Felipe Calderon. His admission may explain Calderon's sometimes aggressive pro-amnesty open borders agenda. We'll have that report.

And: Chaos in our skies. Airlines treating passengers now like cattle. Is it time to re-regulate this airline industry? One of the countries most respected CEOs, former American Airline CEO Robert Crandall will be among my guests.

And we'll have all of that, the latest of the presidential campaign, and much more -- straight ahead here tonight.

Senators Clinton and Obama are campaigning hard now in Indiana and North Carolina. They're trying to break for this one of the closest closest races ever in the Democratic Party for the nomination. Both candidates are trying to convince the party's superdelegates now that they should the party's nominee. The Indiana and North Carolina primaries take place on May 6th, two weeks after Senator Clinton's convincing victory in Pennsylvania.

In just a moment, we'll have a special report on the North Carolina contest, but first, Suzanne Malveaux reporting from Jefferson, Indiana.

SEN. HILLARY CLINTON, (D-NY) PRESIDENTIAL CANDIDATE (voice-over): Right here, over 200 Hoosiers built parts that guide our military smart bombs to their targets. They were good jobs, but now, they're gone to China. (END VIDEO CLIP)

(BEGIN VIDEO CLIP, OBAMA CAMPAIGN AD)

SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: If the plant moves to China and you've been working there for 20, 30 years, and suddenly, you have the rug pulled out from under you, and you don't have...

(END VIDEO CLIP)

MALVEAUX: And ad blitz to the state long ignored by Democrats seeking the presidential nomination, now ground zero, Indiana: heavily Republican, once had a thriving industrial base. Now, many here have lost their jobs and homes and fear losing more. The number of Hoosiers to vote has swelled to 1 million -- 150,000 new voters just this year.

JOHN MELLENCAMP, SINGER (singing): Well, I was born in a small town and I live in a small town.

MALVEAUX: Rocker John Mellencamp was raised in a small town in Indiana. He opened Obama's campaign here and will perform for Clinton, too. Like Pennsylvania, voters from small towns will play a critical role.

MATT TULLY, INDIANAPOLIS STAR: We have 92 counties and each one has at least one or more kind of dusty, old small towns that have been through some tough times.

MALVEAUX: Clinton's success in winning over white blue-collar workers, as she did in Pennsylvania, could give her the edge -- but not necessarily a victory.

TULLY: You can't underestimate the role of small town voters in rural areas. But we have cities like Gary and Indianapolis and Fort Wayne that really produce a lot of the Democratic vote in the primary.

PROF. LINDA GUGIN, INDIANA UNIVERSITY SOUTHEAST: The upper part of the state is more urban. And that's -- and I think that's where Barack Obama is doing well.

MALVEAUX: In Northwest Indiana, 20 percent of the state's voters live in the Chicago media market of neighbor Illinois, where Obama is senator.

TULLY: They watch Chicago news, they get Chicago radio. They feel like they're more a part of Chicago or Illinois.

OBAMA: People are a little more familiar with me here in Indiana.

MALVEAUX (on camera): Both candidates hope that local endorsements will help. The big price for Senator Clinton: Senator Evan Bayh, co-chair of her campaign, also, a former governor of the state. For Barack Obama: the former congressman, Lee Hamilton, co- chair of the 9/11 Commission.

Suzanne Malveaux, CNN, Jeffersonville, Indiana.

(END VIDEOTAPE)

DOBBS: The contest in North Carolina, an even larger for Senators Obama and Clinton. North Carolina is the largest remaining state in the primary race. Polls indicate Obama is ahead in North Carolina at this moment, but Clinton is hoping she can win the support of a large number of undecided voters there.

Jessica Yellin has our report.

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CORRESPONDENT (voice-over): It was in North Carolina that Obama brushed off Clinton's attacks.

OBAMA: You know, you'd just got to kind of let it...

(LAUGHTER)

OBAMA: You know, you know.

YELLIN: And it could be just the place to brush aside her Pennsylvania victory. A "Los Angeles Times" poll taken before the Pennsylvania primary shows Obama ahead by 13 points with 17 percent undecided. It's not surprising since the state's demographics favor him.

The research triangle is filled with affluent and well-educated liberals. And in the last presidential election, one in four voters were African-American. Obama wins handily with both groups.

The big unknown -- the 30 percent of voter here who are low- income whites. It's a group Clinton suggests Obama can't win in a general election. And she's courting them aggressively here.

CLINTON: If we don't begin to pay attention to the growing inequality and wealth and the loss of good jobs that supported families, we won't recognize our country.

MALVEAUX: So is he.

BILL CLINTON, FORMER UNITED STATES PRESIDENT: The fundamental problem is we don't enforce our trade laws.

MALVEUAX: So North Carolina will be an important test.

JENNIFER PALMIERI, CTR. FOR AMERICAN PROGRESS: It's an opportunity for each of them to break out of their mold. I mean, if Obama can, in fact, appeal to the white, the undecided white males there that are -- you know, they are largely going to be from rural and suburban areas, I think that would be a huge victory for him.

MALVEAUX: On the other hand, if Clinton wins affluent whites or African-Americans...

PALMIERI: I think that would show that his base was slipping and that people may be becoming anxious about his candidacy.

MALVEAUX (on camera): It's worth noting that low income white voters - a group that has strayed from the Democratic Party in general. So, winning them over is not a challenge unique to Barack Obama. But Senator Clinton has had some success winning this group in past primaries and she hopes to have more in North Carolina.

Jessica Yellin, CNN, Washington.

(END VIDEOTAPE)

DOBBS: Senator McCain is trying to gain some political advantage from the continuing division within the Democratic Party. Senator McCain trying to win support of uncommitted Democrats and independent voters but pushing what is clearly now a populist agenda. During his visit to New Orleans, Senator McCain blasted President Bush's handling of the hurricane Katrina disaster.

Dana Bash has our report from New Orleans.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT (voice-over): A walk for the cameras through New Orleans' devastated and still largely uninhabited Lower Ninth Ward.

John McCain used these vivid reminders of a stained Bush legacy to try to distance himself from the unpopular Republican president he wants to succeed.

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: Never again. Never again will a disaster of this nature be handled in the terrible and disgraceful way that it was handled, never again. Never again.

(APPLAUSE)

BASH: President Bush famously flew over New Orleans in the days after hurricane Katrina. A mistake McCain said he would not have made.

MCCAIN: In all candor, if I had been the president of the United States, I would have ordered the plane to landed at the nearest Air Force base, and I would have been over here.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And Brownie, you're doing a heck of the job.

BASH: McCain offered other Bush failures.

MCCAIN: Unqualified people in charge. There was a total misreading of the dimensions of the disaster. There was a failure of communications.

MCCAIN: One of the ways we can find the money is by reprioritizing the public works projects which are now based too often on the power of individual congressman or senator.

BASH: This is the finale of a week-long tour of places Republican candidates rarely go, a civil right symbol in Selma, a shuttered plant in a blue-collared town, impoverished Appalatia, all intended to appeal to independents and some Democrats by creating an image of a different kind of Republican.

But it didn't always go to script. He spoke about race to a white crowd, his pro-trade talk didn't go over well in hard hit Ohio.

MCCAIN: It's a bad four letters in this area, it's NAFTA.

There will be many people who will not vote for me, but I'm going to be the president of all the people.

BASH: In New Orleans, McCain's carefully imagery was interrupted by a voter's question about Pastor John Hagee, who endorsed McCain and says things like this.

(BEGIN AUDIO CLIP)

PASTOR JOHN HAGEE, CORNERSTONE CHURCH: What happened in New Orleans looked like the curse of God.

(END AUDIO CLIP)

UNIDENTIFIED FEMALE: And I wanted to point out that over 1,000 churches were destroyed by Katrina and Bourbon Street wasn't touched.

(LAUGHTER)

MCCAIN: When someone endorses me, that does not mean that I embrace their views.

BASH: And despite McCain's vow for the above the fray campaign, a dig at Barack Obama.

MCCAIN: But I didn't attend Pastor Hagee's church for 20 years. And there's a great deal of difference, in my view, between someone who endorses you and other circumstances.

BASH (on-camera): Democratic Chairman Howard Dean issued a statement blasting McCain for, quote, "hiding from votes he casts again Katrina legislation," things like unemployment assistance and also, assistance for health care for survivors of Katrina. McCain responded by insisting those pieces of legislation were nothing more than pork-laden projects.

Dana Bash, CNN, New Orleans.

(END VIDEOTAPE)

DOBBS: Much more on the presidential campaign ahead here.

Also: Mexico's president, Felipe Calderon has a very personal interest in pushing his pro-amnesty agenda, even if he doesn't have the principle and sense of personal honor to do business quite differently than he is.

And: A stunning new example of the federal government's failure to secure our borders. This example is nothing less than a border of boondoggle. We'll have that story and a great deal more. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Some outraged tonight, some disbelief, I suspect, over the latest comments from Mexico's president, Felipe Calderon. Calderon speaking in Dallas, said he has relatives and friends who live in this country illegally. That's right. The president of Mexico admitting, as it turns out again, that he has relatives in this country who are illegal aliens.

But President Calderon said he wouldn't say who or where they are until the United States passes what he called comprehensive immigration reform granting amnesty to millions of illegal aliens. You will note, he didn't say until Mexico under his leadership can bring his citizens back to his country assuring them of both peace and prosperity.

Casey Wian has our report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Mexican President Felipe Calderon traveled to New Orleans this week to discuss closer economic and security ties between the U.S., Canada, and Mexico. He also visited Dallas and spoke to the Institute of Mexicans Abroad where he acknowledged that he has relatives living illegally in the United States.

PRES. FELIPE CALDERON, MEXICO (through translator): We all have someone on this side, cousins, brothers-in-law, friends, aunts and uncles, some of them we know we will never see again while laws don't change here. They cannot move from where they are.

WIAN: Two years ago, while campaigning in Mexico, Calderon disclosed he had a brother-in-law and cousin in the United States. He did not reveal their legal status. But now, while on American soil, he appeared to flaunt the illegal presence of his relatives and shared a laugh with hundreds of countrymen apparently in on the joke.

CALDERON (through translator): Many times the press asks me, well, where are your cousins, your friends? I greet them every day each time that I am able and I tell them, the day there is an immigration reform I'm going to tell them where my cousins and my friends are.

WIAN: Earlier, President Bush joined Calderon at a ceremony marking the reopening of the Mexican consulate in New Orleans. Calderon continued to advocate amnesty for an estimated 7 million Mexican illegal aliens.

CALDERON (through translator): May all Mexicans who live in the U.S. know that my administration will continue to watch over their security and their rights.

WIAN: Mexico now has 48 consulates in the United States, New Orleans is being the fifth to open during Calderon's administration.

(END VIDEOTAPE)

(on camera): A Zogby Poll in 2002 found that Mexicans by more than a two to one margin believe the Southwestern United States rightfully belongs to Mexico. So, it's perhaps a bit surprising, Lou, that Calderon said he admires the courage and bravery of his countrymen to risk it all to go to a land that is not theirs. Lou?

DOBBS: You know, the other thing that is amazing to me is to hear a head of state, this -- Calderon reminds me so much in so many ways of George Bush. But the very idea that he would sit there and say that his countrymen, he would name once immigration reform were passed and not take the opportunity, as the leader of Mexico, to say that he would like to have his family and his cousins and his friends back in Mexico where they could work and secure prosperity and a quality of life for themselves and their children.

That failure of leadership, that failure of national pride on the part of a man who is president of his government is simply astonishing.

WIAN: Yes, it is, Lou. He did say that he hopes to be creating more jobs in Mexico. He said he's working to that end so that Mexicans don't feel that they have no choice but to leave to the United States. He says he's trying to crack down on corruption and the gang violence that is going on throughout Mexico and hurting the economy there.

But the fact that he and that audience were just laughing about the fact that so many Mexicans are violating U.S. immigration law was really kind of a slap in the face, especially given that he did it on U.S. soil, Lou.

DOBBS: Yes. And the slap in the face, frankly though, is that of Mexico. I mean, he is a -- you would think that there would be some pride, some honor on his part that would speak to a repatriating the people who have had to flee Mexico's governmental incompetence, corruption, and failure to provide for their own citizens. I mean it is really a -- just an unconscionable betrayal of government responsibilities this time on the part of the Mexican government.

WIAN: Yes, and quite the contrary, Lou, the Mexican government in some quarters -- some of the state governments have complained about the difficulty they've had repatriating some of the countrymen who have left, places like Arizona where immigration laws are actually being enforced. So, they're complaining about their countrymen coming back, Lou.

DOBBS: Incredible. Thank you very much, Casey Wian.

The Congressional Hispanic Caucus, well, they decided to blast fellow House Democrats as spineless because those Democrats, particularly the Democratic leaders in the House, failed to push through so-called comprehensive immigration reform. Members of the Hispanic Congressional Caucus also said, "The leadership was simply no better than Republicans for scheduling hearings on enforcement and these issues, but not dealing with the overall issue of comprehensive immigration reform."

A statement from House Speaker Nancy Pelosi's office blamed the Bush administration and Republicans for delaying that so-called immigration reform and did not respond to the charges leveled by the Hispanic Congressional Caucus.

Well, as we reported extensively on this broadcast, that so- called "virtual fence" doesn't work. Now, after insisting for years that the fence does work, the Department of Homeland Security announced it's scrapping its border boondoggle - a $20 million virtual fence installed along part of the Arizona-Mexico border.

Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The Department of Homeland Security praised the virtual fence in Arizona just two months ago, saying earlier kinks were worked out and the virtual fence was now operational and affective.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We've actually had operational value come out of the system, people being detected and apprehended. I actually saw it with my own eyes.

SYLVESTER: But now, DHS officials acknowledge that the $20 million radar and ground sensor system has to be replaced, that the infrastructure is not optimal given the terrain. That does not surprise rank and file agents.

TJ BONNER, NATL. BORDER PATROL COUNCIL: There were problems associated with the technology, which would have been readily apparent before they ever constructed this had they bothered to talk to the people who did the job day in and day out. Dust storms, for example, decrease visibility.

SYLVESTER: This broadcast has been pointing out holes in the virtual fence for the past two years.

(BEGIN VIDEO CLIP)

DOBBS: But as we have repeated on this broadcast many times before, technology has already proven completely ineffective in securing or borders.

(END VIDEO CLIP)

SYLVESTER: DHS says, quote, "The 'virtual fence' was never intended or purported to be the perfect, end-state solution. It is a prototype. We anticipated a need for some changes."

REP. KEN CALVERT, (R) CALIFORNIA: Virtual fencing is still a theory, an idea, and different types of technologies are better than others. What we need to do is go to what works first.

SYLVESTER: For Calvert, that's to build not a virtual fence but a real one.

(END VIDEOTAPE)

SYLVESTER: DHS says the equipment from the 28-mile virtual fence in Arizona will be used in other places along the border. And the agency, it still is insisting that the virtual fence is not being scrapped all together.

But consider this -- the taxpayers have already some paid $20 million for this program and will likely have to pay even more to put in a new replacement system. Lou?

DOBBS: Lisa, thank you very much. Lisa Sylvester from Washington.

Up next: New charges that homeowners facing foreclosure aren't receiving the help they need. We'll have the story.

And the battle for the Democratic nomination moves now to Indiana and North Carolina. We'll ask three of the nation's leading political analysts how Senator Clinton's Pennsylvania win has changed this race, if at all. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A vast majority of homeowners now facing foreclosure aren't receiving any help at all with their payment problems. In point of fact, state government officials charged the federal government and mortgage companies are doing virtually nothing to help them. Those officials say the federal government and lenders, in fact, are resisting state government efforts trying to deal with this crisis.

Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): More than 1 million homeowners have been helped by the federal program Hope Now, but according to a coalition of state attorneys general and state banking regulators, 70 percent of homeowners who need help are still not getting help. TOM MILLER, IOWA ATTORNEY GENERAL: Everybody misunderstood the enormity of the task here. There are so many loans; so many of them are done one-on-one. This is an incredible problem to deal with on the scale.

TUCKER: To help determine what else should be done, the officials have asked the banks holding subprime mortgages to provide them with data on loan qualities, sites, delinquency rates, and foreclosure rates. State regulated banks did. Most national banks refused, saying they don't operate under state charters and therefore don't see the point in cooperating.

The Office of the Comptroller of the Currency says the data sharing was unnecessary. That office is in the process of compiling its own data which if it will release later this spring. It's a position that seems to ignore the role that states could play in crafting a solution.

SUSAN URAHN, PEW CENTER ON THE STATES: The states have an important role to play because they are the closest to the particular circumstances on the ground. So, they can understand the particular - the needs of the state, they could customize solutions.

TUCKER: Nearly 8,000 homes go deeper into foreclosure every day according to one national estimate.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: Time now for some of your thoughts.

Ellen in Hawaii said, "Thank you for your unwavering effort to make the Democratic Party more democratic. Often in the minority, your voice for media fairness has been a beacon for those who want to participate in the primary, and to have their votes counted. The entire system and the resistance to counting Florida and Michigan have been shameful and contrary to making every vote count. Was this not the slogan during the 2000 presidential election?"

Indeed, it was.

And Irene in California said, "Lou, I don't always agree with you but I don't always agree with my husband either. You are fair about issues, people, candidates, and you love this country. As a Hispanic viewer, I want you to know that I hope Washington is watching too."

Thank you for that.

And Mike in North Carolina: "I'd just wanted to thank you, Lou. It warms my heart to see there is still a true American reporting the news we need to hear. It's so rare these days to see a reporter who isn't scared to speak the truth. Keep up the good work."

All of us on the broadcast try all of the time, I assure you. We don't always make it, but we sure try. And please be sure to join me on the radio -- Monday through Friday afternoons. Among my guests, Monday, Ross Perot's chief economic strategist: Dr. Pat Choate. We'll be talking about the North American Union and the rising number of registered independents in this country and the likely effect on our presidential election. Geno's steaks owner in Philadelphia, Joey Vento fresh from his debate with Geraldo Rivera, it was unpretty for Geraldo.

That's the "Lou Dobbs Show" on the radio, Monday to Friday. Please join us. Go to LouDobbs.com to find your local listings. We appreciate it.

And up next: The battle for the White House is intensifying. Will Senator McCain benefit from what has become a bitter battle among these two Democrats? Three top political analysts join me.

And: Airlines treating passengers in this country now just about like cattle, although a cattle sometimes, it seems to me get better treatment. Urgent new demands to re-regulate the airline industry led by the former CEO of American Airlines: Robert Crandall, my guest here next.

And: The so-called "Three Amigos," President Bush, Mexican President Felipe Calderon, and Canadian Prime Minister Stephen Harper. They appear determined to create that North American Union despite congressional efforts, despite the people's voice, not even being - even sought, let alone heard.

We'll talk with the leading congressional opponent Congresswoman Marcy Kaptur, she is next.

(COMMERCIAL BREAK)

DOBBS: Joining me now: three of the country's best political minds, all LOU DOBBS TONIGHT contributors. In Washington, D.C., Diana West of the "Washington Times," author of "The Death of the Grown-up." Here in New York, Democratic strategist, Hank Scheinkopf. And, Errol Louis: columnist, "New York Daily News."

Good to have you all with us.

Let me begin, Hank, this is now turning into an ugly battle over what -- over race and identity politics. We are watching Clyburn; we are watching Bill Clinton step back in to it. We're watching Obama, his pastor is back. I mean, what in the world is this party trying to do to itself.

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: Well, what it is really trying to do is to look forward to the fall when Obama, if he's the nominee, will see the following on youtube. Him and the minister, him and Reverend Wright and John McCain with George Bush. And it will be a bloody mess. This is what this is all it's going to get down to, Lou.

DOBBS: Is there any way this, well two questions I guess, is there any way this could have been avoided? Is there any way it should have been avoided?

ERROL LOUIS, "NEW YORK DAILY NEWS": I don't know if it could have been avoided other reason than ask people to be reasonable and practical. Now, this is not a field presidential politics where being reasonable and practical will get you by so far. I mean, you know, when you hear Hillary Clinton trying to sort of drudge up these votes in Michigan where she was the only person on the ballot as votes that should be counted, or you see Obama trying to sort of moved past all of these baggage that he's carrying with him. These are things that if there was a reasonable discipline party, they will say, listen, we need to put all of these aside. We need to have some kind of a rational process and just work our way through it. But you know, the days when you had party elders that could sort of command that kind of respect, (Boston Daily)ph in Chicago. You know, it's just...

DOBBS: You got Howard Dean, Nancy Pelosi, as speaker of the House, and Harry Reid, the Senate Majority Leader. These are not exactly what I would call bosses.

LOUIS: They don't inspire fear. They don't inspire confidence. They're not going to be able to pull this together. So, the centrifugal forces are spinning around that could tear the party apart.

DOBBS: There is no democrat (inaudible).

SHEINKOPF: Nobody expected it to work out this way. No one expected this kind of primary. Nobody saw Barack Obama coming down the highway. This is all unexpected. It doesn't have to be about race, it could be about competence but for some people, when you raise questions of competence, you raise questions of race. She has no choice but to continue banging away at him because he's now perceived as an incumbent. And the way you take down an incumbent is by a comparative or a negative argument. It's just that simple. That's the way it is. And nothing that is going on here is anywhere near what George Bush did to John McCain in 2000 in North Carolina.

DOBBS: But who cares? Who cares who remembers? What George Bush and John McCain did.

SHEINKOPF: Nobody remembers but we keep thinking about this. This is something new that is going on. There's nothing new about this. It was South Carolina, forgive me. Yes.

DOBBS: Well, Diana West, let's talk about the republican side of this. I'm sort of stunned that John McCain basically put a two-by- four across the heads of the republican party in North Carolina when all he had to do was say withdraw this ad and shut the heck up. Then he went a little farther. Is that for a fact or is it a real stupid political move on the part of John McCain?

DIANA WEST, "THE WASHINGTON TIMES": Well, it is stupid if he wants to have conservative voters turn out for him in November. If he's looking for Obama voters, which he may be in terms of courting independents and moderates, maybe it is not so stupid. I mean, I found it absurd, because I think when we get right down to it, the candidates biographies are what we are going to be voting on. And anything goes in terms of examining in the case of Senator Obama, the kind of milieu of anti-Americanism he's been comfortable in overload these many years. So, I find John McCain's behavior extremely strange because this should be important to all Americans. But...

DOBBS: Let's continue that thought. We're going to take a quick break and we'll be back with Diana and Errol and Hank and just one moment.

Also, ahead chaos in our skies. It is time, in my opinion, to re-regulate the airlines. And I've got some great company now. Former American Airlines CEO Robert Crandall says let's re-regulate.

And secret meetings on what some call the North American Union. Congresswoman Marcy Kaptur is demanding that this President tells Congress what in the heck he thinks he's doing. She joins us here, next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: We are back now with Diana West, Hank Sheinkopf, and Errol Louis. Good to have you all with us again today. Hank, this ad with the - showing - in North Carolina by the republicans, showing Reverend Jeremiah Wright back in our faces again, back with Bill Moyers on his PBS broadcast, why won't this guy go away? Is he trying -- does he have any concept of what he is doing to Senator Barack Obama?

SHEINKOPF: What he has found is that he can extend 15 minutes of fame into 20 minutes. And he's going to use it any way he can because he believes in the rightness of his position. No pun intended there. I mean that's what this is all about and damn politics. What he said publicly, if you look at the quotes last week, he kind of said Barack Obama is just another politician. And he's going to now prove that point.

DOBBS: Well, let's take a look and listen. Let's hear what he had to say about Senator Obama's speech in Philadelphia. Here we go.

(BEGIN VIDEO CLIP)

BILL MOYERS, PBS, HOST: In the 20 years since you have been his pastor, have you heard him repeat any of your controversial statements as his opinion?

REV. JEREMIAH WRIGIHT, TRINITY UNITED CHURCH OF CHRIST: No. No, absolutely not. I don't talk to him about politics. And so he had a political event, he goes out as a politician and says what he has to say as a politician. I continue to be a pastor to speak to the people of god about the things of god.

(END VIDEO CLIP)

DOBBS: What do you think?

LOUIS: I think it explains some of why we do find him in our face. I mean, he - especially some of his followers who set up this whole website to try to set the record straight, they have the naive belief --

DOBBS: How did they do? How did they do?

LOUIS: Well, they have this naive belief. It's actually touching in a way that if they just have him explain it. If they just go back to the Bible. If they just talk about what goes on in church, that somehow outside political observers will look at and say, oh, that makes sense. And you know, maybe in the right context, it is not quite so offensive. They couldn't be more wrong. If the political advisers could have them go on vacation for the next six months, I'm sure they would do it. But...

DOBBS: It is too late now.

LOUIS: Well, that's right. And, look, they have every right, like any other American to advance their cause. If they want to try to be clear about what they think has been misinterpreted by the media, they have every right to go out and do it. If they had a better advisory team, I think they might decide whether or not this was the right time to do it. Maybe after next January they could set the record straight.

DOBBS: The best advice that any of us gets, and most of us often neglect is, just shut up. And they -- they, being Jeremiah Wright, and the members of the church, will not shut up. There is also in that breathtaking suggestion that maybe there's a double standard in this country that you can be absolutely acrimonious toward this country and have it be accepted on some basis. There is - I just have to let everybody know, there is no out in this country for those who do not respect this country. There are a lot of sins that will be forgiven, but working against this country, taking this country down will not be one of those in which you find an out for any reason at any time.

SHEINKOPF: I couldn't agree more. Look, I had a friend for many years, a good criminal lawyer who used to tell people that no one went to jail for not saying something, not seeing something, not hearing something. And you know what, it is time for Reverend Wright, although it is very late in the game to say that I got to disappear for six months. I got to do something but every minute he shows up is another minute he takes something out of Barack Obama's fight. It's just that simple.

DOBBS: Diana, your thoughts?

WEST: Well, I think it also shows the extent to which Reverend Wright doesn't say really anything wrong with anything that he had said. And I think on that sort of fork tongue messages in terms of "I as a pastor, say what, do what I have to do" and Senator Obama as a politician does what he has to do, I think it muddies the message. Does that mean that Senator Obama knows full well he is trying to repudiate something that he doesn't really mean to repudiate? I mean, what is the message there? DOBBS: You know what the message is. It's straight forward. He's saying that he's got a job to do. It is like slicing and dicing us all by race, by demographics, by income, by geography and occupation and saying, and of course, behave as you will, because none of that matters against the greater identity, which is we are American citizens and we have a nation to preserve, protect, and defend. I don't get how there can be this going on within the democratic party.

LOUIS: Well, you know, here again, Jeremiah Wright is not within the democratic party. I mean, I don't know what his registration may be, but he is not - he is not what you call a team player when it comes to democratic politics. I think you know, this is what you get when you get these holy men. You know -- whether it is Jeremiah Wright, Dalai Lama, Martin Luther King, any minister you want, they are not going to be that helpful from a political standpoint. They are talking about or attempting to talk about something that is so far above the level of politics they're just - it's not going to be consistent, it's not going to be helpful or comprehensible to a lot of folks.

DOBBS: What about Senator Obama's responsibility here, Hank?

SHEINKOPF: Well, Barack's responsibility - average person when you talk to the street will say, white Catholic or blue collar people will say, you know, it's not that I left the democratic party, it's that the democratic party left me. That was the excuse for Reagan, and that will the excuse for Obama if he's the nominee for a lot of people, why?

WEST: Well, the biggest problem...

SHEINKOPF: The Reverend.

DOBBS: And is it - let's go to Hillary Clinton whose narrative is now starting to move in to the national media. Diana West, is it that we have been too pro-Obama or too anti-Clinton in the national media for that narrative to be so late to the forefront of our reporting?

WEST: Well I think that the press has given Senator Obama a pass for the first year or so of his campaign. And so he's facing questions that really should have come to him and embedded months and months ago, which is very difficult for him. I mean I think one of the things that it's not just about Reverend Wright, we are now assembling a cast of anti-American characters including the former weatherman Bill Ayers. We have in his - also among people in his padre, Rashid Khalidi, who is a, you know, well-known apologist for (inaudible).

DOBBS: I have to say that what I don't understand, Diana West, is this.

WEST: Yes.

DOBBS: With the antipathy towards Senator Obama that has built up over the last few weeks, for the life of me, I don't understand why the democrats, I mean the republicans aren't doing everything they can to get this man the nomination. You know, he...

WEST: Maybe that's behind John McCain's order to the North Carolina party, I don't know, to stop the bleeding. I don't know.

DOBBS: But it still seems that the republicans fare Senator Clinton far more.

SHEINKOPF: The stake for them - that is a major mistake. That's not smart thinking and if the votes in Pennsylvania are any indication of what the future looks like, they look at the spread of those counties by counties in the vote, they should not - they should be really afraid of her and they should know they can take him down. That's the difference.

DOBBS: Errol Louis, you get the last word on this fine, fine weekend.

LOUIS: Well, what the republicans end up doing I think is of less importance than what the democratic party figures out it is going to do. All of the guessing about who will be stronger against McCain. I think it's not -- it is not clear. I think it is just not clear. I mean, when you line up all of the votes in the caucuses, there are some people who are more interested in their hopes than their fears. I mean, a lot of voters have seen the Jeremiah Wright videos, have heard all of the negative commentary, and it doesn't seem to be moving the polls. It doesn't seem to be shaking his support in any kind of fundamental way.

DOBBS: Not even in Pennsylvania when we were told much of the same thing going into that primary when she walked out with a double digit win for Hillary Clinton.

LOUIS: Sure, she was up by 20 points and ended up winning by 10. I mean does that mean that people threw Obama overboard or does it meant hat he almost closed the gap?

SHEINKOPF: He means Bosnia is what it means and in that stupid comment, that's the difference.

DOBBS: He's referring to the misspeak, I believe, as the reference for Senator Clinton.

SHEINKOPF: Not her finest moment.

DOBBS: Fran Lebowitz, I still love what she said about the -- the comedian, the humorist Fran Lebowitz. When I asked her about what Senator Clinton meant by misspeak, she said, "well, misspeak is just an English word for lie." So we have politics in full, full sale. It's kind of interesting and revelatory at the same time, don't you think? Diana West, thank you very much. Errol Louis, thank you, sir. Thank you very much, Hank Sheinkopf.

Up next here, one of the country's most respected business leaders says its time to re-regulate the airline industry. Former American Airlines CEO Robert Crandall joins me. And some members of Congress are demanding President Bush's top secret negotiations with Canada and Mexico on the North American Union. Congresswoman Marcy Kaptur among them. She will be here next.

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DOBBS: Robert Crandall is the former chairman and CEO of American Airlines. He is certainly in my opinion the most distinguished of all the airline leaders in this industry over the last 30 years. And he says the solutions to the airline industry's problems now are less consolidation and more government intervention. Those are words that a lot of people thought they would never hear Robert Crandall utter. He joins us tonight from Florida. Bob, god to have you with us. You and I have known each other a long time. A lot of people would never guess that Bob Crandall would be calling for a re-regulation of the airline industry.

ROBERT CRANDALL, FMR. CEO, AMERICAN AIRLINES: Well, I was opposed to it in the beginning, Lou.

DOBBS: Right.

CRANDALL: I mean, when the hearings were held, there are all sorts of legendary stories about the abuse I heaped on (trade con)ph and others. Then we went on to use the new rules and we were quite successful, but I think the status of the state of the airline industry today pretty clearly show that the government has no plan for transportation systems and certainly no plan for the aviation transportation system. And we are losing an enormously valuable economic asset. And it's just nonsense.

DOBBS: Well, Bob, I have said to a number of people that I consider the CEOs, the current CEOs in the airline industry in this country, to be, at best, shadows of the capabilities demonstrated by previous CEOs over from the 1980s on. Do you disagree with that? Or would you like to argue for them?

CRANDALL: Oh, I don't know that I would argue for or against, Lou. I think there's a lot -- there are some very bright people there and they live in a different world than I lived in, and you have to keep in mind that if they criticize the government, they can be very badly punished and the consequences -- that's you know, I think...

DOBBS: We'll give them a pass on that...

CRANDALL: To stay out of it.

DOBBS: But what I won't give them a pass on is the way airline passengers are being treated in this country. The number of people who have to line up like cattle to go through, TSA Security, who have to go through the nonsense, the way in which these airlines treat their passengers. I mean, it is disgusting. If they are not going to be in the consumer service business, let's regulate it and put together a mass transit service that can be effective and fair and at least treat human beings with the respect they deserve rather than rather than what they are having to endure now. CRANDALL: Well, I do think, Lou, that the circumstances in the industry are dreadful. But I do think there needs to be some government intervention. Look, you can't have a system where a company can go bankrupt, hide off all kinds of costs, then come back into the marketplace, cut prices, thus destroying the economics of the people who have not gone bankrupt. That doesn't work. You can't have labor laws where the unions can back the airlines into a corner and compel them to accept uneconomic labor agreements.

DOBBS: Right.

CRANDALL: You can't have a situation where an airline can schedule 100 flights an hour into an airport that can only handle 50. There needs to be - if not re-regulation, at least government modulation of some of the behavior patterns. Lou, only the government can create the air traffic control system. We are still using 40, 50- year-old technology radar systems instead of GPS. We can move a lot more people a lot more airplanes if we would simply use the technology we have.

DOBBS: Right. And that's another --

CRANDALL: It won't play and that's ridiculous.

DOBBS: And there's another nightmare that you just articulated awaiting us. We are at the fringes of it now, but as the privatization of air traffic control is a nightmare I don't believe any one of us wants to experience at any time. What do you think the likelihood is, because when you talked about what is happening to labor working men and women in these airlines, which is outrageous, I mean, when you look at the experience of Northwest alone, that airline is the basis, I would think, for labor actions for decades to come. But look at what's happening to the passenger, they are outsourcing to foreign countries of beyond inspection of the FAA of maintenance of these aircraft. We are playing with huge tremendous amounts of risk here as well as simple disrespect for the air traveler.

CRANDALL: Well, I think that's all true, Lou. And I'll tell you something else. You know, we talk about trade. I don't consider it trade when you simply export jobs for the purpose of getting lower rates in another country. I don't think we should allow people to outsource maintenance. And to be honest with you, I am very, very tired of talking to people in India whenever my computer break. That isn't the way the world is supposed to work.

DOBBS: Yes. Well, Bob, one last thought here. One thought you want everybody to take home to their congressman or their senator, as they say we want to see the Bob Crandall re-regulation of the airline industry?

CRANDALL: I certainly -- I think we should expect the government to step in. I think we should expect a better air traffic control system. I think we should inspect no more flights in an airport than it can handle. I think we should expect a moderation change in our bankruptcy laws, in our labor laws, all of which would move the aviation business back towards a higher standard of service. DOBBS: Bob Crandall, former CEO of American Airlines. Great to have you here. Thank you very much, Bob.

CRANDALL: Good to see you, Lou. Thanks and good luck.

DOBBS: Up next, President Bush negotiating the security and prosperity partnership of North America without the consent of the people, without the consent of Congress. Congresswoman Marcy Kaptur is among those who think that's not such a smart idea, Mr. President. Stay with us. We continue in a moment.

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DOBBS: Congresswoman Marcy Kaptur is calling on President Bush to halt negotiations of the so-called security and prosperity partnership until Congress is told just what in the world this government is doing. Congresswoman Marcy Kaptur joins me tonight from her home district in Toledo, Ohio. Congresswoman, it is always great to have you here.

REP. MARCY KAPTUR (D), OHIO: Thank you.

DOBBS: Why is the administration not responding to you and to the calls from others to explain exactly what they are doing?

KAPTUR: Well, the executive branch really thinks that they can run everything and they like to ignore Congress. This is just another example on the trade-making front where the executive branch goes beyond its constitutionally authorized powers and doesn't want to inform the Congress, which has the key trade-making authorities under the constitution. This is kind of a follow-on to NAFTA, Lou, called the SPP. And that's what this meeting down in Louisiana is all about. I think it's the third meeting that they have had in four years.

DOBBS: Right. And the idea that they would not be responsive to you -- is the leadership of the house, Speaker Pelosi, and the Senate, Senator Reed, are they responsive and demanding on their prerogatives on the issue of this agreement, Security and Prosperity Partnership so-called which is the foundation for a Northern American union?

KAPTUR: Well, they have been focusing on of late is Columbia.

DOBBS: Right.

KAPTUR: The free trade agreement with Columbia, the issue of mortgage foreclosures, the additional funds that are being asked for the war in Iraq. There are a lot of other issues that have come forward. And so this is kind of sliding by, I think, without a lot of attention.

DOBBS: Have you brought it to their attention? Because.

KAPTUR: We are.

DOBBS: I'm sorry, go ahead. KAPTUR: What I was going to say is that we are doing everything we can to bring it to their attention. The respective committees that should be holding hearings that are not, and I think just other issues have taken precedence.

DOBBS: Well, at this point, it is pretty clear that we have a lame-duck president who is basically going to tell you people to go exactly where he's been telling you to go for some time and can do so without real consequence because he has only another seven months in office. It seems your leadership should be more responsible to you on this issue. How concerned are you about this North American union prospect?

KAPTUR: I m very concerned about it, because just this year, this past year we had a $76 billion trade deficit with Mexico. We were told that after NAFTA passed, we would have more of our exports going down there. We have been exporting our jobs and importing goods from there. Unfortunately, importing a lot of workers who were thrown out of work down there and farmers who were thrown out of work on their land. So NAFTA has really hurt us a great deal as you know. And the SPP, we believed to be an expansion of that done on the executive side with no congressional oversight, helping to push the continent towards this NAFTA highway, the super highway that they want to bring up through Texas, through the center part of the country and up to Canada.

DOBBS: Through the transection corridor.

KAPTUR: We were successful in passing an amendment in the house to prevent that from happening. They didn't pass it in the Senate. And it passed by quite a wide margin. So I think Congress focused with that particular vote, but the administration then keeps negotiating behind closed doors.

DOBBS: All right. As soon as they can find someone not to negotiate with, say Senator Harry Reid in the Senate, perhaps that will be a more (inaudible) outcome for all of us. Marcy Kaptur, congresswoman.

KAPTUR: I hope so.

DOBBS: ... from Ohio. We thank you very much for being with us. Congresswoman Marcy Kaptur.

KAPTUR: Thank you.

DOBBS: And thank you for joining us. Please join us here tomorrow. From all of us, we thank you for watching. Good night from New York.